Deck 14: Developing Merchandise Plans

Question 1

A major disadvantage of decentralized buying is ________.

A) excessive uniformity
B) poor morale at local stores
C) inflexibility in decision making
D) an inconsistent image

Answer 1

D

Question 2

Which merchandising strategy is similar to scrambled merchandising?

A) cross-merchandising
B) micromerchandising
C) cross selling
D) rationalized retailing

Answer 2

A

Question 3

A good or service will be supplied in one basic version in which stage of the product life cycle?

A) introduction
B) growth
C) maturity
D) decline

Answer 3

A

Question 4

A formal buying organization is characterized by ________.

A) the same personnel handling merchandising and other retail functions
B) low organizational costs
C) the merchandising function being a separate department
D) flexibility in organizational design

Question 5

A major advantage of centralized buying for a retailer is ________.

A) the increased role of branch stores
B) greater fit with regional trends
C) faster delivery times
D) greater bargaining power

Question 6

Informal buying organizations are most likely to be found in ________.

A) major retail chains
B) franchisors
C) small independents
D) specialty chains

Question 7

A major advantage of a merchandising philosophy is ________.

A) close supervision of selling staff
B) equal treatment of the selling function
C) the buyer is close to consumers via his or her involvement with selling
D) the use of specialists in each area

Question 8

Which retail merchandising strategy reflects the need to appeal to specific target markets through different product offerings?

A) rationalized retailing
B) micromerchandising
C) battle of the brands
D) cross selling

Question 9

Which type of buying organization generally services small noncompeting retailers?

A) specialized buying organization
B) general buying organization
C) inside buying organization
D) outside buying organization

Question 10

Merchandising includes ________.

A) the purchasing of goods and services but not the sale of them
B) display decisions only
C) selling of goods and services but not the purchasing of them
D) activities involved in the buying and selling of goods and services

Question 11

The target market expands to include middle-income consumers who are somewhat more innovative than the average consumer in which product life cycle stage?

A) introduction
B) growth
C) maturity
D) decline

Question 12

Which is an example of a specialized buying organization for a national supermarket chain?

A) a buyer being responsible for purchasing for all stores in the Southwest
B) a buyer having an assistant buyer and an assistant to the buyer report to him or her
C) a buyer purchasing seafood directly from major fishing fleets
D) a buyer having a $2,000,000 budget each month

Question 13

Which buying organization operates close to the sources of supply?

A) inside buying office
B) outside buying office
C) general buying office
D) resident buying office

Question 14

Which buying organization seeks to receive quantity discounts and bargaining power discounts for its members so that they will be better able to compete against larger chain organizations?

A) cooperative buying
B) inside buying organization
C) resident buying office
D) formal buying organization

Question 15

A major disadvantage of a merchandising philosophy is that ________.

A) responsibility for success or failure may be unclear
B) functions are combined into one position that require different abilities
C) reporting responsibilities may be unclear
D) coordination of buying and selling may be reduced

Question 16

A never-out list is used for ________.

A) fashion items
B) dealer brands
C) fad items
D) best sellers

Question 17

All of the activities involved in acquiring particular goods and/or services and making them available at the places,times,prices,and quantities that will enable the firm to reach its goals comprise ________.

A) merchandising
B) financial merchandise management
C) retail pricing
D) a centralized buying organization

Question 18

A major characteristic of micromerchandising is the ________.

A) lower costs through quantity discounts
B) use of rationalized retailing
C) appeal to local tastes
D) use of the top-down approach to space management

Question 19

A model stock plan is used for ________.

A) dealer brands
B) fashion items
C) staple merchandise
D) key items

Question 20

In a centralized buying organization,________.

A) all purchases emanate from one office
B) purchase decisions are made at local store units
C) local units have freedom in buying, but must use approved vendors
D) purchase decisions are made at the regional level

Question 21

Which brands generally receive secondary shelf locations and receive little or no promotion support?

A) generic brands
B) manufacturer brands
C) dealer brands
D) scrambled merchandising

Question 22

Which fashion theory assumes that a fashion passes from the upper to the lower social classes?

A) vertical trend theory
B) horizontal trend theory
C) diffusion of innovation theory
D) fashion emulation theory

Question 23

A common advantage of scrambled merchandising is that ________.

A) the scrambled goods have high profit margins
B) opportunities for cross-selling decrease
C) customers can be traded-up to more costly goods
D) the sale of substitute goods increases

Question 24

Increased competition for shelf space among manufacturer,dealer,and generic brands is commonly referred to as ________.

A) channel cooperation
B) the battle of the brands
C) channel conflict
D) slotting allowances

Question 25

________ brands are somewhat pre-sold to consumers,require limited retailer investment in marketing,and often represent maximum quality to consumers.

A) Manufacturer (national)
B) Private (dealer)
C) Generic
D) Wholesaler

Question 26

Which retail assortment strategy is characterized by a retailer having a broad target market,one-stop shopping,and a large inventory investment?

A) wide and deep
B) wide and shallow
C) narrow and deep
D) narrow and shallow

Question 27

A major advantage to a retailer's use of private (dealer)brands is ________.

A) less retailer investment
B) support by manufacturer advertising
C) the extent to which they are pre-sold to customers
D) the development of store loyalty among consumers

Question 28

A retailer primarily appeals to the lowest income consumers and laggards in which stage of the product life cycle?

A) introduction
B) growth
C) maturity
D) decline

Question 29

A chain retailer with a national representation can optimize its use of national advertising media through use of a(n)________.

A) informal buying organization
B) resident buying office
C) decentralized buying organization
D) centralized buying organization

Question 30

Category management is a strategy that is used to improve a retailer's ________.

A) shelf-space productivity
B) point-of-sale displays
C) capital costs
D) overall productivity through the use of computerization

Question 31

Decentralized buying is often associated with ________.

A) category management
B) micromerchandising
C) risk-minimization retailing
D) electronic data interchange (EDI)

Question 32

A major retailer desires to use specialists to plan,implement,and control the merchandising function.The most appropriate buying organization is a(n)________.

A) decentralized buying organization
B) inside buying organization
C) informal buying organization
D) formal buying organization

Question 33

The opposite strategy to rationalized retailing is ________.

A) micromerchandising
B) centralized management
C) risk-minimization retailing
D) category management

Question 34

Distinctive,emulation,and economic emulation are three stages in the ________.

A) diffusion of innovation theory
B) fashion emulation theory
C) vertical trend theory
D) horizontal trend theory

Question 35

A vertical fashion trend occurs when a fashion ________.

A) is not successful when passed down to the mass market
B) is first accepted by an upscale market segment, but undergoes changes in its basic form as it is sold to the general public
C) is passed from the lower to the upper social classes
D) retains its basic form as it is accepted by the general public

Question 36

Direct product profitability equals an item's ________.

A) annual sales divided by the total linear footage devoted to a product category
B) gross profit less its direct retailing costs (but not including general overhead)
C) annual gross profit divided by the total linear footage devoted to the item
D) number of days of supply on the shelf

Question 37

In which product life cycle stage do goods or service sales reach their maximum?

A) maturity
B) growth
C) introduction
D) decline

Question 38

In the growth stage of the product life cycle,________.

A) goods or service sales reach their maximum
B) variations in the basic product offering appear
C) distribution is typically very limited
D) a skimming price strategy is used

Question 39

Which retail assortment strategy is characterized by a retailer seeking an image as a specialist?

A) narrow and shallow
B) narrow and deep
C) wide and shallow
D) wide and deep

Question 40

A furniture retailer with three branch stores has an owner that handles store operations,buying,advertising,and finance responsibilities.Which buying organization does the retailer use?

A) formal buying organization
B) informal buying organization
C) decentralized buying organization
D) centralized buying organization

Question 41

A major difference between a vertical and a horizontal fashion trend is based on the ________.

A) ultimate sales level achieved for the fashion
B) speed of diffusion of the fashion
C) social class of the initial group which accepts the trend
D) degree of fashion innovativeness

Question 42

Small retailers seeking to match the same bargaining power as major chains should seek to utilize ________.

A) an inside buying organization
B) a decentralized buying organization
C) resident buying offices
D) cooperative buying

Question 43

A separate store organization used by a department store chain is an example of a(n)________.

A) decentralized buying organization
B) centralized buying organization
C) informal buying organization
D) resident buying office

Question 44

The use of explanatory advertising by retailers and limited distribution by manufacturers are characteristics of which product life cycle stage?

A) introduction
B) growth
C) maturity
D) decline

Question 45

A department store chain,based in western Pennsylvania,can best keep in touch with developments in the ladies clothing market,based in New York City,through a(n)________.

A) informal buying organization
B) cooperative buying organization
C) resident buying office
D) inside buying organization

Question 46

Most goods and services are at what stage of the traditional product life cycle?

A) introduction
B) growth
C) decline
D) maturity

Question 47

Merchandise planning is most problematic for ________.

A) staple merchandise
B) seasonal merchandise
C) impulse merchandise
D) fad merchandise

Question 48

Which retail assortment strategy is used by a department store?

A) narrow and deep
B) narrow and shallow
C) wide and shallow
D) wide and deep

Question 49

The preparation of descriptions of merchandise to be stocked is easiest in a(n)________.

A) model stock plan
B) basic stock list
C) never out list
D) assortment plan

Question 50

A retailer should require that an inventory of goods on hand be updated daily for goods that are on its ________.

A) never-out list
B) model stock plan
C) basic stock list
D) extended merchandise assortment plan

Question 51

The target market consists of the smallest number of consumers in which traditional product life cycle stage?

A) growth
B) introduction
C) maturity
D) decline

Question 52

Which buying organization format for department stores is centralized?

A) main store control
B) equal store
C) separate store
D) diversified retailer

Question 53

Which retail assortment strategy requires the greatest inventory investment for a retailer?

A) wide and deep
B) wide and shallow
C) narrow and shallow
D) narrow and deep

Question 54

Price competition by retailers is most intense in which product life cycle stage?

A) introduction
B) growth
C) maturity
D) decline

Question 55

Specialized regional buying preferences are best served through which buying organization?

A) decentralized buying organization
B) inside buying organization
C) informal buying organization
D) formal buying organization

Question 56

A retailer is concerned that its current organization does not provide adequate attention to the recruitment,motivation,and training of its sales personnel.The retailer needs to consider reorganizing to ________.

A) a centralized buying organization
B) a decentralized buying organization
C) having separate buying and selling responsibilities
D) a merchandising organization

Question 57

The benefits of an outside buying organization are especially important to ________.

A) large retailers located near an important merchandise center
B) large retailers located far from an important merchandise center
C) small retailers located near an important merchandise center
D) small retailers located far from an important merchandise center

Question 58

A retailer believing in the vertical trend theory would sell a distinctive fashion to which target market when the design first appears?

A) upper social class
B) mass market
C) lower social class
D) working class

Question 59

A retailer's descriptions of goods to be stocked in its assortment plan are constant over a five-year period.The assortment plan analyzed is a(n)________.

A) never-out list
B) model stock plan
C) basic stock list
D) extended merchandise assortment plan

Question 60

The use of a perpetual inventory system to monitor inventory levels per unit based on initial inventory levels,purchases,and sales is most common with a ________.

A) never-out list
B) model stock plan
C) basic stock list
D) extended merchandise assortment plan

Question 61

In category management,a grouping of products is viewed as a ________.

A) boutique
B) strategic business unit
C) functional unit
D) vendor responsibility unit

Question 62

Which retail assortment strategy is used by a specialty store?

A) narrow and deep
B) narrow and shallow
C) wide and shallow
D) wide and deep

Question 63

A retail chain can seek to combine the benefits of centralized and decentralized organizations by using a centralized buying organization and a decentralized selling organization.

Question 64

In general,as a retailer moves from a narrow and shallow strategy toward a wide and deep strategy,________.

A) customer disappointment with selection increases
B) one-stop shopping appeals are lost
C) inventory turnover decreases
D) a specialist image is received

Question 65

The selling of car mats,burglar alarms,and extended warranties by a new car dealer illustrates ________.

A) scrambled merchandising
B) trading up
C) selling substitute goods and services
D) selling complementary goods and services

Question 66

Retailers with a merchandising viewpoint are more likely to employ separate buyers and sales managers.

Question 67

Decentralized buying organizations are most likely to secure favorable purchase terms from vendors.

Question 68

A retailer has the greatest control over the pricing,image,and promotion of ________ brands.

A) private (dealer)
B) generic
C) national
D) manufacturer

Question 69

A retailer seeks to minimize direct price competition among its goods and services.Which branding philosophy should the retailer utilize?

A) manufacturer branding
B) private (dealer) branding
C) generic branding
D) mixed branding

Question 70

Cooperative buying organizations generally are comprised of franchisees.

Question 71

An informal buying organization is most likely to be found in a small,independent retailer.

Question 72

Resident buying offices are used by retailers that have main stores nearby important market centers.

Question 73

A conventional supermarket's adding a line of gas barbecues and summer furniture during the summer season illustrates which merchandising strategy?

A) scrambled merchandising
B) trading up
C) handling substitute products
D) selling complementary goods

Question 74

Product obsolescence characterizes the decline stage of the traditional product life cycle.

Question 75

A retailer can purchase a national brand of canned corn for $.39.The canned corn sells for $.52.Total direct retailing costs for the corn (warehouse costs and direct labor)equal $.03 per can.In addition,$.05 per can is charged for administrative overhead.What is the direct product profitability per can?

A) $.05
B) $.10
C) $.13
D) The answer cannot be determined from the information provided.

Question 76

In the horizontal trend theory,a new fashion is accepted by a broad range of consumers when first introduced.

Question 77

Fads and seasonality are part of the traditional product life cycle.

Question 78

Which category management measure is most similar to inventory turnover?

A) reorder point
B) days' supply
C) direct product profitability
D) return on inventory investment

Question 79

It takes a retailer three days to process an order and the supplier an additional five days to deliver ordered merchandise.The retailer should begin to order new merchandise ________.

A) when the current inventory is at 15 units
B) at least two days before the old inventory runs out
C) at least eight days before the old inventory runs out
D) at least ten days before the old inventory runs out

Question 80

For fashion merchandise,merchandise assortment planning is conducted with the use of a basic stock list.